Book Image

The Essential Guide to Web3

By : Vijay Krishnan
3 (1)
Book Image

The Essential Guide to Web3

3 (1)
By: Vijay Krishnan

Overview of this book

Web3, the new blockchain-based web, is often hailed as the future of the internet. Driven by technologies such as cryptocurrencies, NFTs, DAOs, decentralized finance, and more, Web3’s aim is to give individuals more control over the web communities they belong to. Whether you’re a beginner or an experienced developer, this book will help you master the intricacies of Web3 and its revolutionary technologies. Beginning with a concise introduction to blockchain and the Ethereum ecosystem, this book quickly immerses you in real-world blockchain applications. You’ll work on carefully crafted hands-on exercises that are designed for beginners as well as users with prior exposure. The chapters show you how to build and deploy smart contracts, while mastering security controls and discovering best practices for writing secure code. As you progress, you’ll explore tokenization and gain proficiency in minting both fungible and non-fungible tokens (NFTs) with the help of step-by-step instructions. The concluding chapters cover advanced topics, including oracles, Layer 2 (L2) networks, rollups, zero knowledge proofs, and decentralized autonomous organizations (DAOs). By the end of this Web3 book, you’ll be well-versed in the Web3 ecosystem and have the skills to build powerful and secure decentralized applications.
Table of Contents (25 chapters)
Free Chapter
1
Part 1 – Introduction to Web3
5
Part 2 – All about Smart Contracts
9
Part 3 – Writing Your DApps for Web3
12
Part 4 – Fungible Tokens
15
Part 5 – Non-Fungible Tokens
18
Part 6 – Web3 Advanced Topics

Understanding the oracle problem in Web3

In Web3, the oracle problem refers to the challenge of ensuring the integrity and accuracy of data provided by oracles to smart contracts on the blockchain. The problem arises because smart contracts rely on external data to trigger actions and make decisions, but that data may be untrusted, unreliable, or manipulated. Figure 13.3 shows that blockchains or smart contracts do not have a direct way to take or look up external data sources such as weather data. This is also because of the core operating principles of a blockchain, which means it is non-deterministic. Another problem with blockchains is that they have limited integrations with enterprise systems, market data, and data based on events. Therefore, you need an oracle so that a smart contract can really be smart!

Figure 13.3 shows a view of a single point of failure for the data sources. Imagine that all your data comes from one place, such as a single giant computer. If that computer...